Report Says US Unlikely to Meet Biofuel Production Mandates by 2022

The US is unlikely to meet the 2022 biofuel production targets set out in the Renewable Fuel Standard (RFS) barring the discovery and rapid development of innovative technologies or substantive policy changes, according to a National Research Council report requested by Congress.

The report notes that achieving the RFS mandates “would have have mixed economic and environmental effects.” Moreover, the report authors add that striving to meet the mandates would likely increase federal budget outlays at a time when cutting the US budget deficit and debt levels is dividing Congress.

Background on RFS

The RFS was enacted by Congress in 2005 as part of the Energy Policy Act. An amendment to the Act in 2007 mandated that 35 billion gallons of ethanol-equivalent biofuels and 1 billion gallons of biomass-based diesel be consumed in the United States by 2022. The following is a breakdown of the production targets by biofuel type:

4 billion gallons of advanced renewable biofuels, other than ethanol derived from cornstarch, that achieve a life-cycle greenhouse gas threshold of at least 50 percent; and;

16 billion gallons of cellulosic biofuels produced from wood, grasses, or non-edible plant parts — such as from corn stalks and wheat straw.

1 billion gallons of biomass-based diesel fuel;

The challenge of meeting the cellulosic biofuel consumption targets

The report concludes that the RFS target consumption levels for conventional biofuels, e.g. ethanol, and biomass-based diesel fuels would be met by 2022.

However, the report notes that the mandated production numbers for cellulosic biofuels will most likely not be achieved, as there are currently no commercial scale refineries for cellulosic biomass in operation. Furthermore, policy uncertainty and the high estimated costs of cellulosic biomass-to-fuel development have made private sector investors reticent to pursue the necessary research and development even despite a government guarantee to purchase the fuel up to the level of the consumption mandate.

The report concludes that the US won’t meet the RFS cellulosic biofuel mandate unless unexpected innovations in production technology and processes are found and developed to commercial scale over the next few years.

Environmental Impact of RFS

The report notes that the extent to which biofuels production and use will reduce greenhouse gas emissions as compared to producing conventional petroleum is uncertain. The amount of greenhouse gas emissions reductions would depend on methods of production as well as associated land-use or land cover changes, the report authors note.

The conversion of uncultivated land as well as land currently being used to produce food crops and pasture will be required to meet the mandate. According to the report, such an extensive conversion of land would most likely result in “a one-time increase in greenhouse gas emissions large enough to offset the benefits gained by displacing petroleum-based fuels with biofuels over subsequent years.”

Biofuels production to date has also resulted in both positive and negative effects on water and soil quality and biodiversity, says the report. In terms of air quality, it has been shown that biofuels production and use of ethanol to displace gasoline “is likely to increase air pollutants such as particulate matter, ozone and sulfur oxides.” Moreover, published estimates of life-cycle water use of corn ethanol are higher than that for petroleum fuels, according to the report.

Economic Impact of RFS

In terms of economic impact, the report authors write that biofuels would only be cost-competitive with petroleum-based fuels in “an economic environment of high oil prices [$111 a barrel or higher for cellulosic ethanol production], technological breakthroughs, and high implicit or actual carbon price.”

The authors add that barring any breakthroughs in lowering the cost of biofuels production or increasing feedstock yields, a drive to meet the RFS biomass-to-fuels mandate would also likely require expanding land under cultivation for feedstock, which “could create competition among different land uses and, in turn, raise cropland prices.”